Best thing we can offer young people is a job, not benefits, says chancellor

The Chancellor has issued a caution about the risks of the UK’s benefits bill growing excessively without simultaneously providing greater opportunities for young people. Speaking at Labour’s annual conference in Liverpool, John Healey emphasized that reducing welfare spending was not only an economic necessity but also a moral responsibility. He stressed, “The best thing we can offer a young person is not a benefit payment – it’s a first job with training and a wage.”

In his address, Healey unveiled plans to expand a Local Apprenticeships Service available to mayors across England, aiming to create thousands of additional apprenticeships for young people. This announcement comes amid growing pressure on the government to either slash public expenditure or increase taxes ahead of the Budget next month, which is intended to reduce borrowing costs. Healey sought to calm market concerns by affirming that all government commitments would adhere strictly to fiscal discipline, with himself and Prime Minister Andy Burnham aligned on adhering to these fiscal rules — the government’s self-imposed limits on spending and taxation.

Healey acknowledged that the government’s finances are far more constrained than in previous decades, noting, “the money New Labour had in the ’90s is simply not there now.” He criticized the Conservative Party’s tenure in office for leaving Britain in a difficult financial situation, with spending on debt surpassing expenditure on key departments such as the Home Office, Ministry of Defence, and Ministry of Justice combined. Tory shadow chancellor Andrew Griffith responded to Healey by accusing Labour of refusing to control the welfare bill, claiming, “with Labour, it’s always more taxes if you work and more benefits if you don’t.”

The chancellor praised young people as “digital natives, whip-smart, questioning, ambitious, brave,” describing their potential to move from “generation jeopardy to generation hope.” However, he pointed out the significant issue of approximately one million young people classified as Not in Education, Employment or Training (Neets). Healey argued that welfare should serve as a temporary bridge to employment rather than becoming a trap, stating, “It is not progressive to allow a bigger and bigger benefits bill, and a system which offers an income but doesn’t offer a future.”

This focus on young people comes ahead of the expected publication of a key report by former minister Alan Milburn, which will propose recommendations on how to support the one in eight 16 to 24-year-olds in the UK who are currently Neets. Healey indicated that many of these young people have been “signed off, written off,” and said the Labour government would seek to address this problem. Helen Miller, director at the Institute for Fiscal Studies, commented that merely following the fiscal rules would not be sufficient to reduce the national debt, calling it “basically a promise to get down debt tomorrow.” She suggested cutting the benefits bill, potentially including removing certain supports, as one method to reduce debt more swiftly.

In an interview with the BBC’s Newscast, Healey declined to commit to a specific timeline for lowering the benefits bill before the next election, noting that decreasing the number of Neets “cannot be done overnight.” Elsewhere in his speech, Healey reaffirmed his commitment to re-industrializing the country, announcing that Rolls Royce plans to invest an additional £300 million in its factories located in Derby, Bristol, Glasgow, and Rotherham. He also revealed the return of the Union Learning Fund in England—a program initially created in 1998 and later abolished by the Conservatives—to help workers enhance their skills amid the rise of artificial intelligence, though he did not specify how this would be financed.

Healey’s speech notably did not outline any plans for increased defense spending, another area where the government faces pressure. Additionally, when questioned repeatedly by BBC Radio 5 Live’s Matt Chorley about whether the pensions triple lock would be included in Labour’s next manifesto—amid speculation that it might be dropped to fund a new social care system—Healey did not provide a commitment

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